April 6th 2018 is the start of the new tax year and it’s when the changes announced by the Government last Autumn will now take effect. For employers and nannies these changes will ultimately mean changes to costs and salaries and therefore we would encourage everyone to check their payslips carefully in April.
The Key Changes to affect Nannies and their Employers from April 6th are:
1. The Personal Tax Free Allowance will increase from £11,500 to £11,850
The weekly limit for payment of tax will become £227 per week, therefore anyone you employ who earns over this will be required to pay tax. If a nanny is paid gross this will mean more net income in their wages each month and less HMRC payments for an employer. If however a nanny is on a net agreement the take home pay will stay the same and employers HMRC payments will also change.
2. The National Insurance Threshold will rise to £162 per week
An Employer should be registered with HMRC as an employer for national insurance purposes if they pay over £116 per week, and NI contributions kick in at £162 per week. Again, if a Nanny is on a gross salary agreement the take home pay will increase and employer HMRC payments will decrease.
3. Auto-enrolment Pension contributions
Statutory pension contributions are increasing significantly from 6th April to the following contributions.
|Date effective||Employer minimum contribution||Staff contribution||Total minimum contribution|
|Currently until 5 April 2018||1%||1%||2%|
|6 April 2018 to 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
Any Employer who has agreed a net salary with their nanny will see a big jump in contributions from April as both the employer and employee contributions will need to be included to calculate the gross salary.
It is worth pointing out that contributions are not paid on the full salary, only on qualifying earnings, and the upper threshold is now a gross annual salary of £46,384. For more information visit Pensions for Nannies
4. Other changes
The National Minimum Wage will increase to the following:
|21 to 24 year olds||18 to 20 year olds||16 and 17 year olds||Apprentices|
|£7.38 per hour||£5.90 per hour||£4.20 per hour||£3.70 per hour|
Statutory Sick Pay will now be £92.05 and
Statutory Maternity Pay will be £145.18 per week.
Parental Choice are able to support Employers and Nannies understand any of these changes further. Please contact the Payroll Team with any questions.
firstname.lastname@example.org or call 020 8979 6453